Microsoft Fined $732 Million By EU Over Browser

Microsoft's failure to offer users in Europe a choice of browsers has resulted in a fine of $732 million from the European Commission.

European regulators said Microsoft failed to comply with the terms of an antitrust settlement, The New York Times reported March 6. Microsoft agreed.

"We take full responsibility for the technical error that caused this problem and have apologized for it," Microsoft said in a March 6 statement. "We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake—or anything similar—in the future."

Joaquin Almunia, the European Union's competition commissioner, told The Times that binding commitments play an important role in the E.U's enforcement policy "because they allow for rapid solutions to competition problems."

Almunia added that such decisions require "strict compliance" and that failure to comply is a "very serious infringement that must be sanctioned accordingly."

The European Commission is the antitrust arm of the European Union.

The fine follows a 2009 settlement that required Microsoft to provide users with a choice of Web browsers.

"Microsoft failed to offer users such a choice for more than a year—apparently without the failure's being noticed by anyone at the company or the commission," The Times reported.

In a July 17, 2012, statement, Microsoft acknowledged the mistake and laid out plans to correct it.

The company explained that it was required to display a Browser Choice Screen (BCS) on PCs in Europe, where Microsoft's Internet Explorer is the default browser, and while it did in some cases, it failed to do so in others.

"Due to a technical error ... while we believed when we filed our most recent compliance report in December 2011 that we were distributing the BCS software to all relevant PCs as required ... we learned recently that we've missed serving the BCS software to the roughly 28 million PCs running Windows 7 SP1," Microsoft explained.

The commission's fine is thought to be as much a punishment to Microsoft as a message to Google, with which the commission is in ongoing discussions over whether Google has abused its position in the search market by giving its online search and advertising products prominence over those of competitors.

The E.U. has also criticized Google for the way it collects information about the users of its services.

In a rare interview in October 2012, Google CEO Larry Page told CNN's Campbell Brown, "[I think it's] a mistake to start carving out large classes of things that you don't really understand yet, that you don't want to let people do. I think that's kind of the approach that ... a lot of regulators are taking, which I think is sad."

Microsoft's failure to deliver the BCS to all users also affected the take-home pay of Microsoft CEO and Steven Sinofsky, who led its Windows division. In 2012, each received less than the full bonuses they were eligible for, according to The Times, in part due to the BCS issue in Europe.

Neil Mawston, executive director at research firm Strategy Analytics, said "career frustrations" may have been among the causes leading to his departure.

"We think Mr. Sinofsky may have left because his chances of taking the top CEO role at Microsoft were slim in the near term," Mawston told eWEEK in November. "Mr. Ballmer, the current CEO, has a tight grip on Microsoft and he doesn't appear to want to loosen the grip any time soon."

Lately, however, Ballmer's grip may be loosening, as calls for him to step down have increased. In 2011, investor David Einhorn called for Ballmer to give up his post, and more recently Joachim Kempin, a former longtime Microsoft executive, did the same. Founder Bill Gates less candidly told Reuters earlier this month that while Ballmer has achieved "a lot of amazing things ... he and I are not satisfied that in terms of breakthrough things we are doing everything possible."